4.81.10 Quality Review

Manual Transmittal

August 10, 2017

Purpose

(1) This transmits revised IRM 4.81.10, Tax Exempt Bonds (TEB) Examination Program and Procedures, Quality Review.

Material Changes

(1) Updated procedures for the Quality Review of Tax Exempt Bonds Examination Cases to include internal controls per IRM 1.11.2.

(2) Updated manual for position name changes as a result of the TE/GE reorganization. Changed the "TEBQMP Coordinator" to indicate that the Technical Manager is responsible for the TEBQMP program. Changed "Manager, CPM" to "Technical Senior Manager."

(3) Revised manual for plain language edits to comply with the Plain Writing Act. For additional information on the Plain Writing Act, see http://www.plainlanguage.gov.

Effect on Other Documents

This supersedes IRM 4.81.10 dated January 7, 2016.

Audience

Tax Exempt and Government Entities
Government Entities and Shared Services
Tax Exempt Bonds

Effective Date

(08-10-2017)

Christie J. Jacobs
Director, Indian Tribal Governments/Tax Exempt Bonds
Government Entities and Shared Services
Tax Exempt and Government Entities

Program Scope and Objective

  1. Purpose: This manual discusses the Tax Exempt Bonds Quality Measurement Program ("TEBQMP" ) system that is designed to measure the quality of Field Operations (FO) cases including claim cases and penalty determination cases.

  2. Audience: These procedures apply to:

    • TEB revenue agents (examiners).

    • TEB tax law specialists.

    • TEB group managers (managers).

  3. Policy Owner: Tax Exempt and Government Entities (TE/GE).

  4. Program Owner: Indian Tribal Governments/Tax Exempt Bonds

Background

  1. TEBQMP:

    1. Offers management and examiners analytical information.

    2. Identifies areas of improvement which are expected to enhance case quality.

    3. Improves customer service and satisfaction.

    4. Promotes consistency in the exam process.

    5. Provides comparable treatment to TEB’s customers.

Authority

  1. The IRS’ mission is "to provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with fairness and integrity to all."

  2. The IRS Restructuring and Reform Act of 1998 (RRA 98) required the IRS to change its performance measures to balance customer service with overall tax administration responsibilities.

  3. Treas. Reg. Part 801, Balance System for Measuring Organizational and Employee Performance, implemented the IRS Balanced Measurement System. This system supports the IRS’s overall mission by:

    • Assessing organizational performance through a few key output measures.

    • Providing a numerical scoring system for quality.

  4. Top-quality service for TEB FO means resolving material issues in an accurate, timely, and professional manner. TEBQMP evaluates, at an organizational level, whether FO work products:

    • Provide top-quality customer service.

    • Enforce the law through identification and resolution of material issues.


    Thus, TEBQMP measures how well TEB FO meets the IRS mission.

  5. Cases selected for TEBQMP are not evaluative at the group or employee level. However, while TEBQMP attributes are independent of critical job elements (CJEs), a manager may review an employee’s work and analyze whether CJEs were met using the TEBQMP attributes.

  6. This IRM describes TEBQMP for managers and employees in the Indian Tribal Governments/Tax Exempt Bonds division.

Responsibilities

  1. The Director, Indian Tribal Governments/Tax Exempt Bonds ("ITG/TEB" ) is responsible for the ITG/TEB business results that include a Balanced Performance Measurement System.

  2. The ITG/TEB Technical Senior Manager is responsible for the administration and oversight of TEBQMP.

Program Reports

  1. The Director of ITG/TEB, the Field Operations Manager ("FOM" ), the Technical Senior Manager and the Technical Manager receive quarterly reports from the Reporting Compliance Case Management System ("RCCMS" ).

Acronyms

  1. The table lists commonly used acronyms and their definitions:

    Acronym Definition
    CJE Critical Job Element
    CP&C Compliance Planning & Classification
    FO Field Operations
    FOM Field Operations Manager
    IRS Internal Revenue Service
    ITG/TEB Indian Tribal Governments/Tax Exempt Bonds
    QMP Quality Measurement Program
    RCCMS Reporting Compliance Case Management System
    RRA 98 IRS Restructuring and Reform Act of 1998
    TEBQMP Tax Exempt Bonds Quality Measurement Program

TEB Quality Measurement Program

  1. RRA 98 provided the incentive for the IRS to increase its focus on customer service and business results.

  2. Balanced Measures consist of:

    • Customer Satisfaction

    • Employee Satisfaction

    • Business Results

Quality Review Standards

  1. FO examination cases are rated for seven quality standards. Incorporated in these standards is the examiner’s consideration of adequate internal controls. See Document 12872, Tax Exempt Bonds Quality Measurement Program Reference Guide for details on the quality standards for exam cases.

  2. Standards can be rated either "Yes" , "No" or "N/A" . Each quality standard is weighted equally.

  3. Calculate the organizational score for exams by dividing the total number of standards passed by the total number of standards rated.

    Example:

    During the fiscal year, 50 cases are sampled for quality review. The total number of standards rated equals 350 (50 cases x 7 standards). Of the 350 standards rated, 300 standards are passed (i.e., answered "Yes" ). The organizational score would be 86% (300/350).

Case Selection

  1. RCCMS randomly identifies a sample of cases for review from cases subject to the quality review process. Annual programming updates to RCCMS may add, subtract and modify the criteria used to select cases.

  2. The sample size is statistically valid and set to achieve a specified level of confidence within an acceptable margin of error. The sample size may vary each fiscal year as the population of cases subject to review changes.

  3. Cases reviewed are TEB exam cases in status 90.

Reviewers

  1. The Technical Manager appoints the Reviewers who form the TEBQMP review cadre.

  2. Reviewers are experienced and highly competent personnel who:

    1. Are ITG/TEB Technical revenue agents or tax law specialists

    2. Know generally accepted accounting and auditing principles or possess superior skill in interpreting and applying tax laws, regulations, and court decisions.

    3. Know IRS policies and procedure.

    4. Have a fair and impartial attitude.

    5. Demonstrate an ability to assume responsibility and take positive action when warranted.

    6. Communicate ideas and opinions clearly, tactfully, and objectively.

    7. Apply good judgment.

Review Process

  1. When a closed case is selected for review under IRM 4.81.10.4, the Technical Manager will assign the case to a Reviewer in RCCMS to complete the TEBQMP review.

  2. Reviewer:

    1. Use Document 12872, Tax Exempt Bonds Quality Measurement Program Reference Guide to help review cases.

    2. Evaluate the case based on the elements and standards.

      Note:

      Not all of the listed quality elements and standards will apply to each case.

    3. Use your discretion to decide which elements and standards apply; annotate in RCCMS those that don’t apply with "N/A" .

    4. Enter findings into the QMP Survey in RCCMS.

    5. Finalize the case and request transfer on RCCMS. Notify the Technical Manager that the review is complete by sending an e-mail.

  3. Technical Manager:

    1. Forward any paper files to the Ogden Service Center.

    2. Inform the Technical Senior Manager when the TEBQMP has completed all of the reviews for the quarter and generate the quarterly reports.

    3. Provide non-evaluative reports to management.

Reports and Newsletter

  1. RCCMS quarterly reports with Information from RCCMS are sent to the Technical Senior Manager, the Director, ITG/TEB and FOM for review. Information contained in the reports is derived from the RCCMS QMS features and reporting functionality.

  2. Reports are intended to provide an indicator of the extent to which completed case files meet the quality elements and standards. These reports will not provide evaluative information for individual employees.

  3. Quarterly reports may be used for a trend analysis, as the following information will be included:

    1. The current quarter results.

    2. Fiscal year to date results.

    3. Results from the prior fiscal year.

  4. The following reports are computer generated in RCCMS:

    1. Percentage Yes by Standard Report: This report lists cases reviewed by each quarter of the fiscal year quarter. It lists each standard’s percentage scores. The report also lists a cumulative score for each quarter and for the year.

    2. Quarterly Comments Report: This report includes all reviewer comments for the quarter.

    3. National Quality Standard Detail: This lists the number of cases reviewed, the number of cases that passed each element and standard, and the percentage.

  5. Semiannually, the Technical Manager may prepare a newsletter, this newsletter should be shared with all TEB employees after comments are received from the Technical Senior Manager and FO Manager. The newsletter:

    1. Summarizes review results for the prior six month period, including any increases and/or decreases in the quality standards from the prior newsletter.

    2. Offers suggestions on how to improve quality.

Case Return Criteria

  1. A TEBQMP Reviewer may recommend a case be returned to the examiner only when there is clear evidence that an incorrect determination has been reached with regard to the tax-favored status of the issuance under exam. Reviewers don’t return cases that are underdeveloped when the examiner's favorable conclusions are unsupported.

  2. Reviewers recommend returning cases only when one of the following conditions exists:

    1. Clear evidence that an incorrect determination has been reached on a bond’s tax-favored status. However, underdeveloped cases aren’t returned unless the case file shows evidence that the bond is not tax-exempt.

    2. Clearly defined substantial error based on an established IRS position existing at the time of the exam. Clearly defined means the error is clearly apparent as opposed to being vague or uncertain. For arbitrage or rebate violations, substantial means that the proposed change involves an additional amount of arbitrage or rebate of $10,000 or more.

    3. Evidence of fraud, malfeasance, collusion, concealment, or misrepresentation by the taxpayer or representative.

    4. Other circumstances that indicate the failure to return the case would be a serious administrative omission.

  3. If the Reviewer determines that the case should be returned, he/she prepares and sends a memo outlining the reasons for the recommendation to the Technical Manager.

  4. If the Technical Manager agrees with the Reviewer’s recommendation, the manager sends the memo, indicating concurrence, to the Technical Senior Manager.

  5. If the Technical Senior Manager concurs with the Technical Manager, the Technical Senior Manager sends the case to FOM for concurrence.

  6. If both Technical Senior Manager and FOM agree with the Reviewer's recommendation, they obtain the Director, ITG/TEB's approval to return the case.

  7. The Reviewer requests CP&C to reopen the case.

  8. CP&C reopens the case and assigns it to the FO group as designated by the FOM.